Editor’s note: This commentary is by Dominic Cloud, who is the city manager of St. Albans.
[K]udos to the public-private partnership in Brattleboro that saved the 100 jobs at the former Neenah Paper Plant. Through swift action and bold leadership, the Brattleboro Development Credit Corp. assembled a financial package that allowed Long Falls Paperboard to purchase the business while BDCC acquired the land for eventual sale to Long Falls.
The financial package involved a combination of incentives and loans and a lot of collaboration and creative thinking by local and state economic development officials. The governor lauded the project in his weekly press conference. When BDCC director Adam Grinold celebrated these accomplishments in a recent editorial, Vermont State Auditor Doug Hoffer wasted no time penning a companion piece criticizing the financial incentives offered as unnecessary and an imprudent use of taxpayer funds.
These comments are woefully out of synch with the times in which we live. In most of Vermont, our rural communities are in decline. Population numbers, tax base, and workforce readiness are all trending in the wrong direction. In the Statehouse, our legislators are grappling with how to attract the right development to the right location through Act 250 updates and how to keep our single greatest public expense (education) from swamping all others. Meanwhile, the state auditor is hard at work impugning the few programs we have that can create the public-private partnerships that are necessary to reverse our demographic and fiscal trends.
Auditors are supposed to be independent professionals following an objective analytic process. Their credibility derives from their independence and objectivity. Hoffer regularly lambasts the efficacy of Vermont economic development programs and then turns around and audits the communities and agencies that have used those programs successfully. That is a clear conflict of interest that affects the credibility of the audit. The objectivity that should be his stock in trade has been substituted for a policy agenda that believes these programs are ineffective and inappropriate. He can’t be both an objective analyst and a policy advocate. When auditing a program he has previously criticized, Hoffer should refer the matter to an independent public accounting firm.
In a public-private partnership, the public sector uses the tools at its disposal – access to capital, financial assistance, and cost absorption to increase the attractiveness of an otherwise marginal project. These are projects we want to happen that don’t pencil out. They typically involve brownfield reclamation or investment in underserved communities where returns aren’t strong enough to attract private investment. There are countless examples across the state where innovative public-private partnerships were essential to economic development. Witness the revitalization of Winooski and White River Junction. These projects don’t just happen because of market forces; they happen despite market forces because of smart public investment through tax increment financing.
The city of St. Albans has also used the state’s Tax Increment Finance program very effectively to rejuvenate our downtown and grow our tax base. After years of stagnation, the city has added $52 million to our tax base; attracted a national hotel to our downtown; and is poised to complete a $20 million mixed use commercial, retail and mixed income housing project. The single biggest reason we have been able to realize these gains is the formation of public-private partnerships based around tax increment financing.
Left to its own devices, the market will not direct development to our designated centers and rural communities; the rest of the country is proof of that. If we want to grow our tax base and our workforce in a manner that preserves Vermont’s traditional settlement pattern, we must encourage our community and business leaders to form the innovative public-private partnerships that produce the economic growth we desire.
As for measuring the efficacy of the state programs, what is hard to measure about 100 jobs saved and $52 million added to the statewide grand list?
